An Interview with Pete Kazanjy on Modern Sales Metrics

Peter Kazanjy is one of the foremost experts on sales and marketing, with a specific focus on startups and other early-stage companies. Today we probe Kazanjy on one of the topics nearest to his heart: sales metrics, and how conversation intelligence – detailed information about the specific ways in which sales meetings take place– plays into those metrics.

RR: Why are sales metrics important?

PK: Metrics are so important because they help you understand whether you're doing the things that you set out to do, and sales is the place where this has historically been at the top of mind. The revenue that we book is really just scratching the surface, but at least it's better than nothing. The concept of whether we are doing a good job and doing what we're supposed to be doing oftentimes don’t even have a metric associated with them. Revenue metrics themselves aren't sufficient on their own; there are tons of other things that you should be paying attention to in order to help you have a better sense of whether you will achieve your goals and when.

How have sales metrics evolved in the last couple of years?

Consider how professional athletics is generating new types of metrics based on data capture. The same analog is happening in sales. The more of the selling behavior you can capture – the way motion is captured – for later analysis, the better you can get with respect to having good metrical insight all along the pipeline rather than just at the end of the pipeline. The more granular the analysis becomes the more metrics we have further up the funnel.

Let me give you an example drawn from the NBA. Basketball has had a sports metrics renaissance by virtue of cameras that record the entire game and decompose the players into mathematical representations of points generated for later analysis. That analysis has driven a lot of strategic change in the game. Consider the Golden State Warriors. Everyone knows the Warriors are amazing at three-point shooting. That was largely driven by a realization they had years ago that even though you make fewer three pointers, you still make enough of them that the additional point you get when you do make those shots more than makes up for the ones you miss. That was a realization that flew in the face of traditional basketball strategy. The Warriors took it even further, saying not only we should shoot more three-pointers, we should practice shooting more three-pointers, and recruit people who are good at shooting three-pointers. That all cascaded from the fact that they were recording activity on the court in a way that could be analyzed after the fact.

That is a really big job. What if people aren’t comfortable capturing and analyzing that kind of data? Can they grab some low-hanging fruit here without becoming data analysis experts?

You can implement metrics at lower levels of maturity and still get huge benefits. The first step is to understand what precursor activities eventually lead to successful deals. You have to start out understanding your playbook, and what activities are supposed to be happening within it. That can be as simple as drawing your sales process on a whiteboard and asking, “This rep was supposed to have ten meetings last week. Did we get there or not?” Even that simplistic behavior can really accelerate focus. From there, you grow it: How much time was spent in those meetings? If you’re using Chorus, you can determine how much talk time was spent during those meetings. Over time, reps spend their time on better and better things. You can start at a very basic level, and still get massive value.

I would almost argue that a manual whiteboard approach could be a better way to change the behavior than just automatically capturing it on the back-end.

If you think about the metrics lifecycle, it’s not sufficient to just capture the information. You have to capture it, analyze it, and then expose it so it can be consumed. That’s what changes behavior. What we’re trying to do is get people to shoot more three-pointers. If we record the game and see how many three-pointers were shot versus not and then we don't share that information, what’s the point? The feedback loop is one of the most important things here. To your point, sure, start out capturing less but make sure it is habitually being consumed by your team, because that is what's going to drive behavioral change. The goal is to find the behaviors that lead to success, then guide them to improve those behaviors.

Getting tactical, what are the top few metrics that every VP of Sales should be tracking?

It depends on the size of the organization. Obviously bookings are important. The next thing I’d be thinking about are customer-facing meetings. That’s where sales are happening, in face to face meetings. After that there are really dozens of metrics that might be important. The pipeline is important – how much pipeline is being created, how many opportunities are being created, how much of that pipeline is real? A lot of these metrics connect together in a big lattice.

What’s the most important piece of data that people aren’t collecting today?

I think customer-facing interactions. That information is captured in various systems like calendars and other systems, but it isn’t well-utilized and doesn’t go deep enough. You should be able to go to any sales rep and ask them what their baseline for customer-facing interactions is. They should be able to say, “I’m supposed to have this many customer-facing meetings a week, and this many are supposed to be first-time meetings, this many are supposed to be follow-up meetings, and this is how much talk time I’m supposed to have.” That’s a really big first step that ensures everyone knows what they’re supposed to be doing.